A common approach to maintaining mainframe or legacy systems has been, “If something isn’t broken, don’t fix it.” Although this may have been an acceptable approach in the past, enabling enterprises to avoid the challenges and risks of modernizing their systems, it definitely isn’t wise today with ever-evolving technological advancements and the business benefits that come with them. If business and IT leaders consider modernizing legacy systems to be a big risk, they should be aware of the even bigger risks of not modernizing them that will have an inevitable impact on their business.
Mainframes remain an important asset
A significant number of Fortune 100 companies have mainframes, yet a strong ambition is growing among IT and business decision-makers to harness the value of cloud.
According to a recent study, 67 of the Fortune 100, 45 of the top 50 banks, 8 of the top 10 insurers, 8 of the top 10 telcos, 7 of the top 10 retailers, and 4 of the top 5 airlines use mainframes to run business-critical applications and operations. Despite their widespread use, these business-critical, mainframe-based applications and platforms lead to several challenges, such as a high total cost of operations (TCO) and a lack of agility. These pose clear impediments to rapid business growth, especially when compared to what a typical cloud-native application offers, allowing enterprises to achieve their digital transformation objectives of innovation and agility while ensuring existing business process and practices aren’t lost or disrupted. With an awareness of cloud-driven benefits, most business and IT leaders can develop clear strategies for modernizing their legacy mainframes to become cloud-native applications and unlock the value of cloud to deliver transformative outcomes.
Planning for the “day after”
Modernization projects often fail to live up to the hype due to a lack of strategic planning. According to the 2021 Mainframe Modernization Business Barometer Report, 77% of respondents to the survey said they started but failed to complete at least one modernization program, and a lack of adequate planning was cited as the primary reason for those failures. Thus, modernization programs have a high probability of failing to deliver the outcome within schedule, without effort overruns, and with a positive return on investment (ROI).
One of the main reasons for such a high degree of failure is not planning for the “day after.” In most cases, modernization solution owners only think about application code, databases, and data, but they don’t plan for the entire platform ecosystem, including the interfaces, target operations, nonfunctional requirements (NFRs), architecture and, most importantly, the loss of knowledge. These oversights are a major risk to modernization initiatives, irrespective of which solution customers are trying to implement. Even simple lift-and-shift or rehosting projects are not trivial.
These overseen areas often are encountered in testing or worst-case analysis during production parallel, resulting in delayed go-lives and in some cases “no-go” situations, impacting brand value, causing revenue loss or major rework and, in most cases, forcing the enterprise back to the drawing board.
First step: De-risking a holistic strategy
The key to a successful modernization is to plan for the day after scenario right from the inception of the program itself. This planning should entail a series of vital steps:
Such planning should not only cover the code, data, and infrastructure, but should also include intangible assets, such as tech knowledge or standard operating procedures (SOPs) to effectively manage and maintain the modernized application/system. Doing so will uncover all the risks that can derail a modernization program.
Let us look at the insurance sector as an example. An insurance provider can assess its existing systems, developed through years of investments to get its rating and regulatory compliance correct. The enterprise’s modernization will then focus on three essential steps:
1. Migrating their systems to a new cloud platform
2. Refactoring the monolith system by rearchitecting it into a macro/micro services-based architecture focused on specific components (for example, modularizing the following individual components as “engines” or services):
b. Regulatory compliance
c. Policy issuance
3. Leveraging these components/engines to bring new insurance products and distribution options to market more quickly and efficiently, based on greater levels of agility, while delivering better customer experiences
At Wipro, we focus on a holistic risk management approach that covers the full range of business, IT, process, employee, operational, and financial risks, as shown below.
Our de-risking strategy encourages customers to consider several “what if” scenarios and ask a number of questions:
As an example, in an automated migration scenario, the generated target code was causing readability and maintainability issues for the developers, who were having to compare it to handwritten code. The risks that can go unnoticed in such a scenario are the carryover of technical debt and the loss of knowledge through the process, which should be addressed upfront in the planning stage. As a mitigation, we recommend refactoring the code as well as focusing on knowledge management throughout the modernization journey. To prevent a loss of knowledge, teams should document the current and target capabilities, business rules/logic, code walkthroughs, and upskilling and cross-skilling initiatives while maintaining clarity on the target system’s known error database/IT service management (KEDB/ITSM) process. Similarly, this approach can be extended to scenarios of testing, governance, and so on.
Wipro, having delivered successful large modernization programs, has consistently demonstrated the de-risk approach throughout our end-to-end modernization projects, eliminating an enterprise’s unanticipated risks. Our approach focuses on collaboration with business and IT leadership teams, proactively identifying and addressing the inherent fears or risks to ensure a successful modernization journey.
As a case in point, one of our large financial services customers wanted to start on a large custody platform modernization, and its initial fear was a loss of knowledge due to the replacement of its legacy mainframe system, which manages over US$2 trillion worth of assets. The leadership team’s fundamental ask was to de-risk the initiative and help their business build confidence even before starting on the modernization journey. The Wipro team responded by quickly identifying, understanding, and delivering comprehensive documentation on an application’s technical capabilities and how it would align with the custody platform’s business capabilities and processes, hence eliminating any of the business team’s doubts about how to move forward.
Another case in point is a large student aid organization, whose objective was to modernize its mainframe system, while their long-term goal was to be the platform of choice for student loan servicing. The company had previously embarked on a modernization project that, despite reducing TCO, was not delivering the expected results or addressing its future vision. Through a strategic consulting engagement built around our de-risked modernization approach, Wipro understood the enterprise’s business objectives, analyzed its legacy applications, and determined the right modernization strategy for harnessing cloud-native platform capabilities and helping them become a more competitive brand, thus ensuring relevance as well as future-ready resiliency.
As writer Frank Peretti said, “Don’t worry about getting perfect; just keep getting better.” Interestingly, this advice applies to legacy modernization.
Enterprises have a plethora of options for modernizing their business-critical mainframe applications, with hyperscalers offering kick-start assessments and proof of concepts/pilots. However, it is extremely important to look at strategies that clearly offer an end-to-end, accelerated, and de-risked modernization process. Wipro’s holistic approach meets all of these modernization journey criteria, and our expertise enables us to partner with businesses across the industry spectrum, including large financial services (such as banking, capital markets, and insurance) and healthcare organizations that are risk averse but are aspiring to modernize. We can ensure that an enterprise’s “day after” following a modernization will enable it to adopt new innovations and discover the art of possible in partnership with the Wipro Legacy Modernization team.
Anil Kumar Mallanna
Senior Consultant – Legacy Modernization, Wipro
Anil brings in 25+ years of IT experience with extensive business knowledge of enterprise-wide applications and experience in designing & implementing mission critical applications. He leads our Americas Legacy Modernization charter and has led successful Sales, Presales, Consulting and IT Delivery organizations serving global leaders in large Financial Services Industries.
General Manager - Insurance, Wipro
John joined Wipro in January of 2022 and has brought over 30 years of Consulting, Technology, and Sales Experience to his role at Wipro. He has overall responsibility for our Insurance Sector for the U.S.
During his career John has held senior leadership positions at AIG (NYSE:AIG) where he was responsible for LOB system development and support services to AIG’s operations in 40 countries, he led EMC’s (NYSE:EMC) Microsoft Services division during which time he led business development and delivery activities to consistent growth in excess of 20% year over year, and most recently he had responsibility for business growth in Accenture/Avanade’s Northeast region. He has also started several companies including New Technology Partners and Technology Training Group, which were later acquired. John has extensive expertise in Program/Project Management, Enterprise Architecture, and Optimization of IT Operations and Infrastructure. He has applied these skills with many different clients in the Insurance Sector.